In order to offer customers a variety of items readily available for delivery, a merchant (whether engaging in electronic or conventional “brick and mortar” commerce) may hold various quantities of such items within one or more inventory facilities. Keeping items in inventory may serve to buffer variations in customer demand, or in a manufacturer or distributor's ability to supply various items. For example, different items offered for sale by the merchant may have different manufacturer lead times. Holding quantities of such items in inventory may enable the merchant to offer a more consistent availability of these items to customers despite the different lead times.
Many merchants employ inventory management schemes that attempt to ensure that the inventory on hand is sufficient to cover expected customer order volumes for a particular period of time. In other words, inventory management schemes typically focus only on whether there is enough inventory on hand to meet projected demand. However, storing inventory is not without complications. For example, providing and maintaining a physical facility in which to store inventory presents recurring infrastructure costs directly attributable to the inventory items stored in the facility. Further, while items are in storage awaiting sale, debt or capital costs associated with the items may accumulate. Items being held in inventory may also depreciate, become obsolete, expire or spoil (e.g., in the case of perishable items), become damaged, or otherwise incur other costs attributable to holding. As such, when these and other inventory holding costs are considered, having too much inventory may also become a concern.
While the specification is susceptible to various modifications and alternative forms, specific embodiments thereof are shown by way of example in the drawings and will herein be described in detail. It should be understood, however, that the drawings and detailed description thereto are not intended to limit the appended claims to the particular form disclosed, but on the contrary, the intention is to cover all modifications, equivalents and alternatives falling within the spirit and scope of the specification.